Insiders made noteworthy buys in two consumer and retail sector stocks this past week (June 4 to 8, 2012), and sold eight others. These, along with insider buys and sells last week in other sectors and groups (discussed in prior articles on the basic materials sector, energy sector, healthcare sector, and technology sector) were selected based on a review of over 1,600 separate SEC Form 4 (insider trading) filings last week, as part of our daily and weekly coverage of insider trades.
The filings are noteworthy based on the dollar amount sold, the number of insiders buying or selling, and based on whether the overall buying or selling represents a strong pick-up based on historical buying and selling in the stock:
Autozone Inc. (AZO): AZO is a leading operator of over 4,800 retail auto parts stores nationwide and in Mexico and Puerto Rico, offering automotive parts and accessories that focus primarily on do-it-yourself (DIY) customers. This past week, five insiders filed SEC Forms 4 indicating that they exercised options to acquire 30,375 shares, and sold 28,375 of those shares for $10.9 million. In comparison, corporate insiders sold about 0.3 million shares in the past year.
AZO has been a stellar long-term performer rising over four-fold since hitting bottom in the 2008/09 recession, and up almost six-fold in the past decade, benefiting from a multi-year trend of fewer new cars sold as a result of the ailing economy. In its latest Q3 (May), the company reported revenues in-line and beat analyst earnings estimates ($6.28 v/s $6.25), with same-store sales up 3.9% and also gross margins up slightly year-over-year.
Its shares currently trade at 14-15 forward P/E compared to the 27.7 average for its peers in the retail/wholesale auto parts group, while earnings are projected to grow at an annual rate of 17.7% from $19.58 in 2011 to $27.11 in 2013. Historically, the company has traded in a 10-18 PE range, on a TTM (trailing-twelve-month) basis versus the current P/E of 17.2, at the high end of that range, which maybe all the more significant if the multi-year trend of fewer new cars sold begins to seriously unwind as the economy bottoms-out going forward.
In addition to AZO, insiders also reported noteworthy sales this past week in seven other consumer and retail sector stocks, the first three of which have also been surging recently:
- A $3.0 million sale by President John Culver at Starbucks Corp. (SBUX), that operates over 17,000 coffee shops worldwide, including over 11,000 stores in the U.S.;
- A $1.9 million sale by EVP Phillip Mason at Ecolab Inc. (ECL), that markets cleaning, sanitizing, pest elimination, maintenance and repair products to the hospitality, food service, healthcare, industrial and energy markets;
- A $1.4 million sale by President Ernie Herman at TJX Companies (TJX), that is a leading off-price apparel and home fashions retailer in the U.S. and internationally, operating its stores under the T.J. Maxx, Marshalls, Winners, HomeSense, HomeGoods and T.K. Maxx trademarks; and
- An $11.3 million sale by two insiders at PVH Corp. (PVH), that designs and markets men's, women's and children's dress shirts, sportswear, footwear, accessories, and other related products;
- A $2.3 million sale by EVP Christine McCarthy at Walt Disney Company (DIS), that is a diversified worldwide entertainment company that operates theme parks and resorts, produces filmed entertainment, operates broadcast radio & TV networks, and licenses, publishes and sells toy, books, etc. based on Disney characters;
- A $2.3 million sale by SVP Michael Jacobson at eBay Inc. (EBAY), that is a leading provider of online marketplaces and electronic payment services via ebay.com and paypal.com;
- A $1.0 million sale by Director Alvin Shoemaker at Wynn Resorts Ltd. (WYNN), an operator of casinos in Las Vegas and Macau.
On top of these, noteworthy insider buys this past week in the consumer and retail sectors included:
- Dollar General Corp. (DG), that is a discount retailer of general merchandise items in the U.S., including highly consumable, seasonal, home products and basic clothing categories, in which Director William Rhodes purchased 5,000 shares for $0.24 million, in comparison to 15,240 shares purchased by insiders in the past two years; and
- Tiffany & Co. (TIF), that is engaged in the design, manufacture and retail of fine jewelry worldwide, in which Director Robert Singer purchased 2,000 shares for $108,430, in comparison to insiders purchasing 4,000 shares in the past two years.
Credit: Fundamental data in this article and company descriptions are based on SEC filings, Zacks Investment Research, Yahoo, Thomson Reuters and Briefing.com. The information and data is believed to be accurate, but no guarantees or representations are made.
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